NEW DELHI: Finance Minister Nirmala Sitharaman will chair the 41st Goods and Services Tax (GST) Council meeting on Thursday. Minister of State (MoS) for Finance Anurag Thakur, Finance Ministers of States and Union Territories (UT) and senior officers from the Union Government and states will attend the meeting which will begin at 11 am today via video conferencing. "Finance Minister Nirmala Sitharaman will chair the 41st GST Council meeting via video conferencing at 11 AM in New Delhi today. The meeting will be attended by MOS Anurag Thakur besides Finance Ministers of States and UTs and Senior officers from the Union Government and States," the Ministry of Finance tweeted. In the last meeting held on June 12, the GST Council decided to waive o fees for late ling returns between July 2017 to January this year in a bid to minimise the impact of COVID-19 crisis on micro, small and medium enterprises (MSMEs). On Wednesday, Congress interim President Sonia Gandhi held a meeting with Chief Ministers of Congress-ruled states and their counterparts of West Bengal, Maharashtra and Jharkhand on the issues related to GST dues of states and said that refusal to pay GST compensation to states is nothing short of betrayal on the part of the Narendra Modi government.
Source: Business Standard
The Central Board of Indirect Taxes and Customs (CBIC) announced the deferred duty payment scheme on Tuesday, adding that it had centralized intimation of entitlement to the scheme to all customs ports, thereby removing another hurdle for compliance. Central and state level public sector undertakings (PSUs) can now pay customs duty 15 days after clearance of imported goods through customs, a move that is set to ensure speedier clearance and ease compliance for companies. The Central Board of Indirect Taxes and Customs (CBIC) announced the deferred duty payment scheme on Tuesday, adding that it had centralized intimation of entitlement to the scheme to all customs ports, thereby removing another hurdle for compliance. “This measure is expected to result in speedier clearance of the goods imported by the PSUs, thereby helping them in their activities,” the Board said in a statement. Central and state PSUs importers will have to register with the CBIC on the basis of a recommendation letter from a joint secretary level officer of their administrative ministry or department. The deferred duty payment scheme is presently available to 244 Authorized Economic Operators (AEOs) who can get their imported goods immediately and pay customs duties subsequently. The Board has done away with the requirement of approved AEOs having to intimate every customs port of their entitlement to avail the facility of deferred payment of customs duties. “This would now be handled centrally… This will also apply to the approved PSUs,” it added. The scheme was launched in 2016 as part of ‘Turant Customs’ reforms which envisages a faceless, contactless and paperless customs environment for enhancing ease of doing business, increasing efficiency and improvement in turnaround time.
Source: Economic Times
NEW DELHI: Reiterating the government’s vision of Atmanirbhar Bharat, Piyush Goyal, Minister of Railways and Commerce & Industry on Wednesday stated that India should vie for a leadership role in global renewable power initiatives and connect the villages as well in this futuristic programme. Delivering his inaugural address at the launch of ‘Powering Livelihoods’, an initiative by The Council on Energy, Environment and Water (CEE) and Villgro Innovations Foundation, the minister highlighted that a lot of innovations are coming up in the renewable energy space. Urging the council to look at sectors such as cold storage, water and small textile powerlooms, Goyal said that the mission for Railways is to be 100% electried by 2022. “By 2030, we will be a net zero carbon emitter. Today we are transporting 1.2 billion tonnes of freight. We hope that this will go up to 2 billion tonnes in the next 5 years and will be the world's rst large railway of this dimension. There is a lot of surplus land and land across tracks to generate 20 GW of Made in India solar equipment or wind equipment in use. This will give us 20 GW production capacity of renewable energy and enough kilowatt hours to power our entire railway,” he stated. Referring to the cold storage system, the minister added that conductive cold storage solutions with interplay of renewable energy can be of immense help especially in the peak hours. Goyal also spoke about the plans of the government to ensure water reached every home by 2024. “RO plants will become the labour of the future. Connecting them with renewable energy to get clean drinking and cooking water is the way forward. Many areas have shortage of water. For example Tamil Nadu. Desalination of plants will be of immense help - not only does it make water available but it is also clean water,” he added. Emphasising that the triangle of innovators & startups, industry and government is imperative to bring such solutions to scale, Goyal stated that such efforts can help to strengthen our ‘transmission network.’ He suggested the need to develop a viable electric cooking system for fast cooking which can be a big leg up for the plans laid out by the government. Such a system, he said, can offer a huge domestic manufacturing potential. “So far we have induction heating and electric cooking but it takes very long. Fast cooking mechanisms through electric cooking which can replace cooking gas will be a big boost. 280 million homes need cooking - if all of them can be converted into electric cooking, think of the scale, savings and potential in terms of carbon emission. Ultimately all of this can move to renewable energy,” he reasoned. The virtual launch was also attended by Damilola Ogunbiyi, CEO and Special Representative of the UN Secretary-General for Sustainable Energy for All, and Co-Chair of UN-Energy; and Rajiv Kumar, Vice Chairman, NITI Aayog, among others. The Rs 22 crore initiatives provide capital and technical support to Indian enterprises working on clean energy-based livelihoods solutions. It also recently offered a cumulative emergency funding of Rs 1 crore to six selected enterprises which could help them tide over the current crises caused by Covid-19. Abhishek Jain, who is leading the initiative at CEEW, said, “Under Powering Livelihoods, we will help enterprises in the clean energy-based livelihoods sector to get better support from financiers, investors and policymakers. This will help them scale up and achieve meaningful impact.” Over 40 lakh microenterprises in India indicate lack of electricity as the top bottleneck to their business. While about 60 clean energy innovations for livelihoods exist, their deployment on the ground is limited to hundreds, at best.
Source: Economic Times
Addressing the captains of the Indian Industry, Union Minister of Finance and Corporate Affairs, Smt. Nirmala Sitharaman stressed that structural reforms are a key priority of the government as has been reflected in the slew of measures & policies announced since outbreak of COVID-19. Every policy which was introduced had a structural component. Consequently, the reforms are having significant impact on the recovery process which we are currently witnessing. Further, in order to facilitate the recovery process, the Home Ministry has given out directions to the state governments for imposing no curbs on the movement of people and inter-state movement of goods & services. “There cannot be better time for exemplar cooperation between government, regulators and industry to ensure that Indian comes out from the present crisis”, she added. Taking cognizance of the fact that many sectors such as Tourism, Hotels & Hospitality, Real Estate & Construction and Airlines have been disproportionately affected by the pandemic, the Finance Minister said that these are critical sectors with significant multiplier impact on the economy. In order to ease the pain of few of these ailing sectors, the Standard Operating Procedures (SoPs) for the hotels, banquets & related activities will be looked into, she assured. On the issue of strategic disinvestment, Smt Sitharaman highlighted that there was a need to move fast on cabinet cleared disinvestment decisions. Regarding the private investment cycle which got a fillip from the corporate tax cut in September 2019, investments however couldn’t take off due to outbreak of COVID19.SmtSitharaman was of the view that in a post-COVID world, these should fructify. “With post-COVID reset happening, emphasis has to be on adoption of data driven manufacturing models through ploughing greater investments in these models”, she further added. On the issue of local manufacturing, SmtSitharaman said that Productivity Linked Incentives (PLIs) scheme has met with excellent response and has helped speed up manufacturing of critical bulk drugs and APIs in 6 states. On delayed payments by the government agencies, it was said that the Finance Ministry is taking periodic reviews to expedite the due payments to the industry. Further, the Finance Minister alluded that infrastructure sector plays a key role in speeding up growth momentum; hence, to give its financing a further boost, external funds will also be welcome. Responding to a question about the need for lowering GST rates on 2-wheelers, she assured that this was indeed a good suggestion as this category is neither a luxury nor a sin good and hence merits a rate revision. Consequently, this will be taken up with the GST Council, she added. Mr Uday Kotak, President, CII, in his opening remarks, highlighted that we are seeing ample signs of a nascent recovery from the lows seen in April-May as a result of the supportive steps taken by both the Central Government and RBI. However, the localized lockdowns implemented in many States has given rise to supply-side bottlenecks, which could impede growth when demand side cranks up. He further added that government owned institutions like NABARD, SIDBI and NIIF have the potential to evolve into development finance corporations in order to support recovery. Mr Chandrajit Banerjee, Director General, CII in his welcome remarks highlighted the continual support from the government in assisting the industry navigate through the difficult times.
Source: PIB
The export of 5 million N95 masks and 2 million medical goggles a month has also been allowed, according to a notification from the Directorate General of Foreign Trade. The export of nitrile gloves continues to be prohibited. Masks other than the N95/FFP2 category and face shields can also be freely exported. Indian manufacturers will now be able to freely eport personal protective equipment (PPE) as the government on Tuesday removed restrictions on the export of medical coveralls. The export of 5 million N95 masks and 2 million medical goggles a month has also been allowed, according to a notification from the Directorate General of Foreign Trade. The export of nitrile gloves continues to be prohibited. Masks other than the N95/FFP2 category and face shields can also be freely exported. The government had put restrictions on the export of medical equipment like PPE, masks, and gloves to prevent a shortage of these items in the country during the coronavirus pandemic. However, as local production capacity ramped up and the domestic demand was adequately served, manufacturers lobbied the Centre to allow the export of these items to generate additional revenue to counter the decline in the apparel business.
Source: Economic Times
The department of commerce is proactively engaging with state governments to promote exports, Commerce Secretary Anup adhawan said on Wednesday. The secretary also requested state governments to extend their support to take forward the initiatives to boost country's outbound shipments. "We have been proactively engaging with states in terms of encouraging them to create export policies, in terms of allocating the export function to a senior level, to a dedicated department and to a dedicated officer," he said. Wadhawan was speaking at the release of the rst edition of 'Export Preparedness Index, 2020'. Gujarat has topped the chart, followed by Maharashtra and Tamil Nadu. "We are working with states to not only have a state export strategy covering infrastructure, logistics, incentives, all other facilitation and promotional measures but also having a decentralised strategy covering each and every district," he added. Talking about the index, he said the issues related to wrong attribution of export numbers of one state to other would be addressed. Those issues "we are trying to address" through exporter awareness by creating windows in the shipping bills and in the GSTN formats, "so that right at the ground level, the source of the exports, right to the district level is accurately captured and states do not have this grievance that exports originating from a district in their state is wrongly attributed to some other state," he said. There has been a paradigm shift in the incentivisation regime for exports, he added. "You see as a competing nation, competing with various countries including new entrants into the export arena like Export performance in quantitative and qualitative dimensions are key metrics for assessing the health and prospects of an economy, he added. Vietnam, we have to match the global sought of package which is available to investors," he said. He added that India has started moving in that direction in the recent past, and the entire approach to incentivising exports has seen a paradigm shift. "We are moving away from the MEIS (Merchandise Exports from India Scheme) type of incentive to production linked incentives, to improvement in the physical environment in which investors can start operating in a plug and play manner," Wadhawan said. Export performance in quantitative and qualitative dimensions is key metrics for assessing the health and prospects of an economy, he added. Contracting for the fth straight month, India's exports slipped 10.21 per cent to USD 23.64 billion in July on account of decline in shipments of petroleum, leather and gems and jewellery items.
Source: Economic Times
Mumbai: General government debt which is the combined liabilities of the Centre and states is likely to hit a record 91 per cent of GDP this scale, a brokerage report said on Wednesday. This will be the highest in record since data began to be maintained in 1980. General government debt-to-GDP ratio stood at 75 per cent in FY20, as per the report by economists of Motilal Oswal Financial Services. The debt ratio is likely to be at a high 80 per cent by FY30 and is unlikely to fall to the targeted 60 per cent even by FY40 without further hurting growth, it added. The government's capital outlays have been playing a bigger role in the overall economic growth for the past many years. At the same time, since FY16, government debt has also been rising continuously. Government debt stood at 66.4 per cent of GDP in FY 2000 and 66.6 per cent in FY15. Since then, it has been heading north at a faster pace, reaching 75 per cent in FY20. The report says unless private spending picks up strongly, real GDP growth over the next decade will be slower, averaging at 5-6 per cent as against 7 per cent in the 2010s. "The combined general government debt rose to 75 per cent of GDP in FY20 from 70 per cent in FY18. It is likely to reach 91 per cent of GDP in FY21, which is the highest since 1980 when data was made available and will stay at above 90 per cent of GDP up to FY23, before moderating slowly to 80 per cent by FY30," the report said. A surge in public debt will restrict the government's ability to spend significantly in the current decade, as it has done in the past few years, it said. While real GDP growth averaged at 6.8 per cent between FY14 and FY20, real scale spending grew at an average of 9 per cent during the period. "Since a large part of non-interest revenue spending like defence, salaries and pensions is fixed, there is a high possibility scale investment will grow at an even slower rate in the current decade," it added.
Source: Economic Times
Post-COVID-19, the overwhelming sense is that the world will not be the same again and a new normal could emerge, the Reserve Bank of India (RBI) said. Cautioning that India's potential output may undergo a structural downshift following the pandemic, the Reserve Bank on Tuesday made a strong case for deep-seated and wide-ranging reforms to regain losses and return to the path of sustainable economic growth. The COVID-19 pandemic will intict deep disguration on the world economy and the shape of the future will be heavily contingent upon the evolving intensity, spread and duration of COVID-19 and the discovery of the elusive vaccine, the RBI said in its 'assessment and prospects' which forms part of the central bank's Annual Report for the year 2019-20. Post-COVID-19, the overwhelming sense is that the world will not be the same again and a new normal could emerge, the Reserve Bank of India (RBI) said. "In a post-pandemic scenario, deep-seated and wide-ranging structural reforms in factor and product markets, the financial sector, legal architecture, and in international competitiveness would be needed to regain potential output losses and return the economy to a path of strong and sustainable growth with macroeconomic and financial stability," the RBI said. As in the rest of the world, "India's potential output can undergo a structural downshift as the recovery driven by stimulus and regulatory easing gets unwound in a post-pandemic scenario," it noted. Moreover, this recovery is likely to be different as the global financial crisis occurred after years of robust growth with macroeconomic stability; by contrast, COVID-19 has hit the economy after consecutive quarters of slowdown, it added.
Source: Economic Times
China, India and Indonesia will be the only G-20 emerging economies to post a strong enough pick up of real GDP in the second half of 2020 and full-year 2021 to end next year above pre-coronavirus levels, Moody's said in the August update of Global Macro Outlook 2020-21. Moody's Investors Service on Tuesday said India, China and Indonesia will be the only G20 emerging economies to post a strong enough pick up of real GDP in the second half of 2020, and retained its projection of 3.1 per cent growth contraction for India in 2020. "The economic outlook of emerging market countries is more challenging than in advanced economies. In our baseline projections, China, India and Indonesia will be the only G-20 emerging economies to post a strong enough pick up of real GDP in the second half of 2020 and full-year 2021 to end next year above precoronavirus levels," Moody's said in the August update of Global Macro Outlook 2020-21. For 2021 year, Moody's has projected Indian economy to grow 6.9 per cent. The Indian economy grew at the slowest pace in 11 years at 4.2 per cent in 2019-20. Moody's said an economic recovery is underway, but its continuation will be closely tied to containment of the virus. Economic data show a quick rebound in goods consumption in a number of advanced economies. However, pandemic fears will continue to hinder a complete recovery. It projected a 4.6 per cent contraction for G-20 economies in 2020, followed by 5.3 per cent growth in 2021. With the exception of China, we expect economic activity in every G20 economy to fall this year. It said in countries with existing banking sector weakness, such as India and Turkey, there is a risk of a self-sustaining negative loop in which adverse real economic developments and bank weakness reinforce each other and harm longterm productive capacity. Moody's said disputes over trade, technology and foreign policy between China and some of its trading partners, including the US, Australia, the UK, Canada and India, have escalated since the start of the pandemic. The emphasis of various governments on shoring up domestic productive capacities can also be viewed as an attempt to reduce their co-dependence on the global economy. "Over time, geopolitical tensions between competing powers could exacerbate in a less interdependent world. Asian countries are particularly vulnerable to changes in geopolitical dynamics. "The rise in tensions between China and countries bordering the South China Sea and clashes on the border with India suggest that geopolitical risks are rising for the entire region," Moody's added.
Source: Economic Times
India should send the signal that “we stand for globalisation, we stand for exports but are not afraid to import”, if we want to grow exports, said Arvind Panagariya, professor of economics and the Jagdish Bhagwati Professor of Indian political economy at Columbia University. Except for a gap of about 200 years, India has been a large contributor to global output, Panagriya wrote in his book India Unlimited: Reclaiming the Lost Glory. In 1820, India contributed about 16% of global gross domestic product (GDP). China (33% of world GDP) and India together controlled half of the world’s GDP. Currently, India’s exports lag behind China’s, and southeastern countries such as Vietnam and Bangladesh have become competitors, especially in the textile sector. In his Independence Day speech, Prime Minister Narendra Modi spoke about Atmanirbhar Bharat or self-reliant India. He also spoke about being ‘vocal for local’, ‘Make in India’, and ‘Make for the World’, which would mean increasing exports.
Panagariya, who was the first chairman of the NITI Aayog, the Centre’s policy think-tank, from January 2015 to August 2017, spoke to IndiaSpend about how India can become a global export power house, how it needs to change policy and how companies on the ground can be supported.
Making for the world means that we become more export-oriented. How do we do that?
First of all, we need to change the optics a bit. If we truly want to be an export-oriented economy, then there has to be signalling. Two things--one is signalling and the other is substantive policy changes. Both are important. A good example of signalling is South Korea in the early 1960s. President Park Chung-hee, who led the Korean revolution, was to South Korea what Lee Kuan Yew was to Singapore. First thing Park Chung-hee did was just take charge himself, create a committee which he chaired himself. This was a committee that would meet once in a month, and all export interests would come in there--his own ministries, industry chambers, exporters themselves, some of the academics--[and] would then say what they need to do to capture global markets. And every month they would review the progress, bottlenecks and how those bottlenecks ought to be removed think that sends a huge signal and we ought to do something like that. Even if it is not once a month, [we could do it] every three months. If there is a review of that kind where the progress is assessed by the Prime Minister’s committee, it sends a huge signal.
If you were to look at the last decade, many people would argue that a lot of industries which could have been here--including for instance, garments--have left India and gone to countries such as Bangladesh and Vietnam. Why would that change or how can that change?
That is why I think signalling is very important--that we stand for globalisation, we stand for exports, but are not afraid to import. When we also simultaneously say we are going to do import substitution, which is what we have been saying and doing really, then the signal gets mixed up: That India wants to come to the global market as an exporter but it is not there as an importer. Policy-wise, it does not help. That is the first thing, signals have to be very clear. I think our signals have been very mixed in addition to the policy barriers that we face. Vietnam and Bangladesh have done better than us in terms of labour markets, land markets, business friendliness, particularly in the apparel sector, which is where we need to capture that market at the global level. Vietnam and Bangladesh have been ahead of us.
You have argued several times in your book, as well as in your article published on July 22, that we should avoid the import substitution trap. How do we break out of that?
That is where we have to be bold and understand the economics of globalisation. We cannot be an export powerhouse without also being open on the import side. Remember, you want to export only so that you can import more as well. Just imagine, if you were not importing anything, why would you export? That would be like taking products and dumping them in the harbour because you are not getting anything in return. The whole idea behind exports is that you can import things that you do not produce at a low cost. That is the basic point. The reason we fall into import substitution is because producers often drive the policy--the manufacturers, industry associations and so forth. And for the producers, it is a lot easy to say: “We have potential for a billion mobiles. Indians are buying a few hundred million mobiles every year. And there is no risk for us and we can capture this market. As long as imports are kept out, the market is there and there is no risk. As we can all assemble mobiles, let us do that.” That seems very plausible to the government. What we do not realise is in doing so, particularly when we are doing this through not policy reform but through import protection--that is imposing tariffs on the foreigners--then we are encouraging our less efficient producers to get into the market. And these are not going to be global size kind of manufacturers. We have done that in the last 5-6 years, a lot of entry has happened of domestic manufacturers in mobiles. But in the end, not one of them is going to be an export powerhouse. We have seen the prospect; it is only some of the larger ones, the multinationals who have entered--who in any case operate in the global market--who could potentially be exporters. So what we are doing is taking resources from industries where we are much more competitive and into the ones that we are not competitive.
The example that you used of local mobile manufacturers not becoming competitive why does that happen? Or why did that happen?
Now we go back to policy issues. Why is it that from the very beginning, we were not mobile producers or manufacturers, and by now major exporters, like China? That has to do with our overall policy regime. First of all, we started opening up in 1991. Our exports as a proportion of the GDP was only 7% at that time including goods and services. We started, and we were very gradual to liberalise. By the time the mobile revolution comes, everything, including phone manufacturing, was in the public sector in India. The private entry started in the mid-1990s but it really was not properly opened up till Prime Minister [Atal Bihari] Vajpayee put in place the new telecom policy. That telecom policy allowed the entry of private players, but not for manufacturing. So that revolution could actually happen because at that time we were open to importing mobiles. We had signed the International Technology Agreement at the World Trade Organization under which we said that we will allow technology products to enter with zero tariffs, zero protection and so these mobiles would come in. And if you look at the usage of mobiles in India, the way it expanded was phenomenal. It was truly exemplary. Our telephone production at that time was in small scale industries. We used to actually reserve a large number of products for exclusive manufacture by the small scale industry, which never goes in with the export market in mind. So, as far as manufacturing was concerned, at that time, there was no chance that we could compete globally. And with zero tariffs, of course, imports came in quickly. Thankfully so, because we could get the mobile revolution. Now, small scale reservation is gone, but labour markets are still a huge problem.
If you were to look at traditional industries--garments, light engineering, including the toasters and ovens that China excelled in--all of which also happened in recent times, what is that we can do today, if we could?
First of all, let us be very clear that we want to be an open economy. That signalling is very important. But policy-wise, labour markets are very inflexible in India. If you are a company of 100 workers or more, then it is effectively impossible to lay off any of the workers. And that deters firms in industries like apparel from becoming very large because then they have to deal with labour issues. It is not that entrepreneurs do not want to employ workers. The whole purpose is to employ workers, not to fire them. But sometimes there are some workers who vitiate the environment and in such circumstances, you need to be able to lay off those workers, take them out so that the firm can operate properly. Do you feel that is a critical component amongst the reasons as to why we are not able to move ahead in light engineering?
In my judgement, it is. A lot of people contest that and I am eclectic in this matter. If others think that there are other barriers the removal of which will lead to these outcomes, I am quite happy to listen to that as well. And I do not believe in one single reform. One single reform will not do it, but it is one of the critical ones. Also, I think, for our large enterprises, land markets have become inflexible and land has become very expensive today.
If you were now to start with a clean state, how would we do it? What would give entrepreneurs the confidence, particularly in the industries that you genuinely feel you have missed the boat? You say in your book that in 2014, China exported $186 billion of clothes, almost $782 billion of electronics and electricals. The figures are much higher now, over $1 trillion. Where do we start and even if we start do we stand a chance?
You never missed the boat. The boat is always there. It is a matter of whether we get on to it. In fact, now China is getting off the boat in many products, and we are the natural ones [to take its place]. Who has got the 500-million strong workforces? Only India, nobody comes close. So I still personally think that it is purely a matter of policy, and we [need to] begin to give proper signals while also changing policies. I have one suggestion that I have written in the book as well. The model I am very influenced by is the Shenzhen model of China. Take two or three coastal areas, where you have ports--you have them in Gujarat, Andhra, Maharashtra, Orissa--and take out a land area that is at least 300-500 sq km and declare that as an autonomous employment zone. And as in Shenzhen, empower the local administration to change the labour laws within at least that particular zone. Introduce a kind of flexibility and allow easy movement of imports into the zone, and exports out of the zone. So, facilitate trade as well. It does not require any export subsidies, or export requirements. If they want to sell domestically that is fine. If they want to sell abroad that is fine. But fix your domestic laws nicely in three or four of those zones and see what happens.
We have tried that but that has not quite worked in the past.
Because the model has always been wrong. What we have tried are the special economic zones [SEZ]. These are small little operations, many of which became land grabs. The whole approach that we take--that every state has to have a SEZ.I remember in the NITI Aayog, the proposals coming in: “In such and such area, SEZ is supposed to be 10,000 acres. But small states cannot have it. So let us make it 1,000 acres.” But that is not the way. It is not a matter of every state having everything. Industry locates itself in a few states and then the workers move in. Shenzhen, when they started, had a bunch of fishing villages, a population of 300,000. Today, you have 12 or 13 million. So workers have moved in. The local language is Cantonese, everybody speaks Mandarin because they come from the rest of China. So people will move in, industry will move in. And once the signal goes out, a lot of the industry that is moving out of China would come into these zones. And once that happens, we can begin to showcase that both to the outside world, and the domestic constituencies that this liberalisation is a good thing. We can then extend across the country. One of your premises for economic growth overall is that we should have an export-led economy, which in turn means a strong manufacturing-led economy. In India, the argument would be that we are a large domestic economy. We have 1.3 billion people, we have enough to create for, produce for, and sell to within the country. You thoughts?
That is a huge strength and I do not dispute that. We are now also a reasonable size economy, close to $3 trillion, we are getting there. It is a good size market. But there is no comparison with the global market. The global market is way bigger. Your manufacturing alone would be multi-trillion. The goods export market today in the global economy is $17 trillion, and we are $3 trillion total--with goods, services, agriculture and everything. So it is still a very large market.
But that is not the only reason. The much more important reason to be out there is that the global marketplace is where the technological improvements and innovation happen. If you are absent from there, you will not learn those things. I like to use this analogy with cricket: Why do we have such fantastic cricket players coming one after the other? You have Saurav Ganguly, Yuvraj Singh, [Sachin] Tendulkar, Virat Kohli, MS Dhoni who has just retired. This is happening because we are playing cricket of every kind. We have been at the forefront of international cricket--[it] makes a huge difference. That is where your mettle is tested as well. You also learn from other players but you also get tested there. You really have to work hard. We academics, whether we are operating in the market place here, which is global, or we are operating within a small little country, if my peer group is my local competitors only, I know I can be laid back. I can do one or two articles every year and still be a rajah [king]. But I cannot survive here [globally]. I am just here by what I did in the last year. Whatever stock you created in the last 40 years is history. What did you do in the last year that is the standard by which we get judged. That is exactly what happens in the global marketplace. So it is very important. If you can get the global companies to come in, they bring their capital, bring in their management, their links to the world markets, their technology and what we supply is good workers. It is a perfect complementarity. The Japanese have extra capital, but they do not have enough workers there to work on that capital. Let that capital come into India. We have the workers--Japanese capital, Indian labour, we can kind of cooperate together.
Post Trump, a lot of manufacturing left China or began to leave China and moved to other parts of Southeast Asia, or even moved back to America or Europe for that matter. India currently has tensions on the India-China border. What would be your prescription to take advantage of that situation, economically?
For a long time, I was very much for the RCEP [Regional Comprehensive Economic Partnership], which included 16 Asian countries, India and China among those. But post Galwan [valley, which saw a violent face-off in June], I have really changed my mind. I do not think we can really trust China in the longer run and we need to decouple. I am very much opposed to doing this decoupling by starting a trade war with China. Some of the things that directly go into security like Huawei equipment or some of the things that directly impacts security, fine, there we have to take action based on security considerations. But otherwise we should move away from China gradually. And we can do that if we forge trade relationships with a large number of other countries. Within Asia, we have Japan, South Korea, we have Australia, we even have a number of ASEAN countries. I would actually start with a free trade agreement with the European Union. That is a large market. I think we do not have a serious conflict in forging a free trade agreement with the Europeans because they will not push hard on issues of labour standards, intellectual property etc., which the US will. Likewise on agriculture: Europeans do not have huge export interests. With the Americans, the export interests of American farmers will come in conflict with our own willingness to liberalise our agricultural market. So for that reason, start with the European Union. We have to be bold, we have to be willing to open our market for automobiles, spirits and so forth, which are export interests for the Europeans. We have to be prepared for that if we want the large market--$14 billion-odd worth of apparel and footwear to the Europeans. We have to be willing to open our own markets as well. The United Kingdom is another good market where we can have a free trade agreement. Gradually, if we do those--even Canada and Australia--confidence will be built up, we can then be ready to forge similar agreements with the US. That should be our roadmap. That process also allows us to liberalise our own, and that sends the signal that India really wants to be an open economy.
What are the two or three things we could do to ensure that we get this off the ground both from the top end, which you have touched upon in terms of policy, but also equally from a bottom-up point of view, from the perspective of companies?
I would very much pitch for the autonomous employment zones. It sends out a huge signal and would also solve, within those zones, the policy problems with respect to labour and land laws. Second, the Prime Minister has to give a very clear signal by bringing in some of these labour-intensive product exporters. Also within that fold, we need to bring in foreign manufacturers. What has been missing very badly, especially in these labour-intensive sectors, are medium and large enterprises in India. I think we are populated by very small enterprises, particularly in apparel, footwear etc. These very small enterprises--shops with 20 tailors--are not your big exporters. There are two or three big manufacturers, consult them on what more needs to be done. If the Prime Minister's Office takes that kind of initiative, it will send a huge signal. I think the states will then follow; some of the labour, land reforms, states can do. Karnataka, for example, on land, has done very good reforms. They are trying to allow the conversion of land around the cities, from agricultural to non-agricultural uses and so forth. And that I think is a very important reform because that is where the industry has to expand--in the periphery of the cities. If we do these two things: autonomous employment zones and the Prime Minister really showing very centralised, focused interest in export of labour intensive products by both domestic firms and multinationals abroad, states will follow.
Source: Economic Times
“I strongly believe in Be Indian and Buy Indian, and I think each one should make a conscious decision to buy products made in our country,” said Gautam Hari Singhania, Chairman and Managing Director, Raymond Limited, Indias largest textile and apparel brand. In an interview with IANS, Singhania said India is a very large economy with 1.3 billion people. “While the world looks at us as a market, I think we should look within for our products which are best in the world,” he added. “I believe, Be Indian Buy Indian will help revive local consumption,” he said. “We need to come up with something more suitable for our country that will empower us to give the much needed boost to our economy. “For instance, it is imperative for India to continue to host IPL matches on its soil to give fillip to economy and sentiments of people of India as we are coming out of the impact of the pandemic. India can certainly handle such a high-profile sporting event, if UAE can,” Singhania said. On the impact of Covid 19, he said, “Given the discretionary nature of the Textile and Apparel industry, the pandemic has affected us. With the lockdown, all factories were shut and demand came to a standstill. In this backdrop, the Indian textiles industry accounting for roughly 14 per cent of the total industrial output and a key contributor to the economic activity has also been adversely impacted.” Raymond is challenging costs restructuring operations to mitigate the impact. “At Raymond, we are challenging all costs and have also implemented restructuring to ensure efficiencies. “In line with the prevailing market conditions, the company has undertaken the process of cost rationalisation and various cost control measures related to sales and marketing, manpower, rentals and others to minimise the impact on business due to the pandemic,” Singhania said. Singhania said textile as an industry cannot move totally towards digital. “While some products have moved towards digital, I don’t think textile as a category can move totally towards digital. I think today digital for the textile industry will be less than 1 per cent and I’m sure as things open up of which we are seeing greens shoots, customers will come back to the store very quickly,” Singhania said. “Having said that, at Raymond we have accelerated our pace of digital adoption and will be moving our channel and trade partners extensively onto digital platforms for trade bookings and other related activities,” Singhania said on the digital strategy. Stronger brands are expected to do better. “We have always seen that, the stronger brand gets much stronger and the weaker one goes wayside. I always look at this as an opportunity. In our endeavour to battle the COVID-19 pandemic, Raymond has launched an exhaustive range of Personal Protective Equipment (PPE) offerings. I am sure Raymond will come out much stronger by end of this,” he added. “As demand is reviving, we are witnessing the consumer having a clear preference for stronger known brands such as Raymond. Earlier when a consumer bought three shirts, he experimented with three brands. However, now when he buys one shirt he wants to go for a stronger brand because of the assured quality and I think that is a real opportunity for Raymond,” Singhania said.
Here are the excerpts:
Q: What has been the impact of Covid 19 pandemic on the textile and apparel industry in India? A: Given the discretionary nature of the Textile and Apparel industry, the pandemic has affected us. With the lockdown, all factories were shut and demand came to a standstill. In this backdrop, the Indian textiles industry accounting for roughly 14 per cent of the total industrial output and a key contributor to the economic activity has also been adversely impacted from the uncertainties of global demand as well as subdued domestic demand. However, barring the intermittent black swan event like Covid pandemic, we are equally hopeful for bouncing back to growth as soon as the pandemic curve witnesses an arrest in the near future.
Q: What is the strategy that Raymond has adopted to face this situation? A: At Raymond, we are challenging all costs and have also implemented restructuring to ensure efficiencies. In line with the prevailing market conditions, the company has undertaken the process of cost rationalisation and various cost control measures related to sales and marketing, manpower, rentals and others to minimise the impact on business due to the pandemic.
Q: What is your take on the Atmanirbhar Bharat campaign? A: I strongly believe in Be Indian and Buy Indian, and I think each one should make a conscious decision to buy products made in our country. India is a very large economy with 1.3 billion people. Whilst the world looks at us as a market, I think we look inside for our products which are best amongst the world. I am sure we can get out of pandemic together stronger. Strong initiatives being taken by Central Government and the confidence building driven by Prime Minister’s “Atmanirbhar” policy initiatives continue to ignite hope for an earlier than envisaged revival of our economy.
Q: What does it mean for brands like Raymond? A: We have always seen that, the stronger brand gets much stronger and the weaker one goes wayside. I always look at this as an opportunity. In our endeavour to battle the Covid19 pandemic, Raymond has launched an exhaustive range of Personal Protective Equipment (PPE) offerings. We are using our garmenting facilities in Bengaluru to manufacture PPE products (including masks and suits) which are currently being supplied to government, hospitals and other institutions. I am sure Raymond will come out much stronger by end of this.
Q: Shoppers are still wary of visiting retail stores. There is a shift towards digital, is apparel becoming part of the trend? A: While some products have moved towards digital, I don’t think textile as a category can move totally towards digital. I think today digital for the textile industry will be less than 1 per cent and I’m sure as things open up of which we are seeing greens shoots, customers will come back to the store very quickly. Having said that, at Raymond we have accelerated our pace of digital adoption and will be moving our channel and trade partners extensively onto digital platforms for trade bookings and other related activities. Our new digital infrastructure and omni-channel capabilities give us the competitive advantage to have a unified view of our inventory and will service our consumers across the length and breadth of the country. As the fashion industry is going ‘Phygital’, Raymond is committed to create delightful consumer experiences both in the online and offline world. As Indian economy is gradually opening up we have started re-opening our stores and 1000+ Raymond stores are now open for business. It’s also heartening to see that our loyal consumers are waiting for our shops to resume business.
Q: What are your expectations from the festival and wedding season? A: By end of September, things should pick up and I am very bullish on the same. With the onset of the Pooja season in the East and we are hopeful the demand will come in from there and I am sure we will see the benefits of the same.
Q: How will the fashion industry reorient itself to the changed dynamics post Covid and how is Raymond participating in the rejig? A: The market is changing and the world is changing and I am sure, water will find its own level. Having said that Raymond has launched an exhaustive range of Personal Protective Equipment (PPE) offerings. We are using our garmenting facilities in Bengaluru to manufacture PPE products (including masks and suits) which are currently being supplied to government, hospitals and other institutions. Additionally, our FMCG business was quick to respond and launched a slew of personal hygiene products as well as skin friendly hand sanitizers and cleansers as a part of Raymond Care initiative.
Q: Raymond is advocating Be Indian, Buy India. What does that translate into for consumers? A: I believe, Be Indian Buy Indian will help revive local consumption. Governments across the world are coming up with innovative measures to revive consumption, for instance, if you consider in UK, the government was paying for a percentage of people who went out to restaurants. It was their way to kick-start their economy. We need to come up with something more suitable for our country that will empower us to give the much needed boost to our economy. For instance, it is imperative for India to continue to host IPL matches on its soil to give fillip to economy and sentiments of people of India as we are coming out of the impact of the pandemic. India can certainly handle such a high-profile sporting event, if UAE can.
Q: How will it boost employment and manufacturing? A: The government needs to proactively assess the situation and eliminate the bottlenecks in manufacturing. India has a massive employable workforce and there is a dire need for self-sufficiency in various industries to bring down trade deficit. In our economy like India needs a robust manufacturing sector. The need for creating a robust manufacturing sector is critical. India must create one million jobs per month to capitalise on the demographic divide and manufacturing is the only activity that can provide livelihood opportunities to a huge chunk of the population outside of agriculture.
Q: What are the changing consumer preferences seen during Covid-19? A: As demand is reviving, we are witnessing the consumer having a clear preference for stronger known brands such as Raymond. Earlier when a consumer bought three shirts, he experimented with three brands. However, now when he buys one shirt he wants to go for a stronger brand because of the assured quality and I think that is a real opportunity for Raymond. There is an enhanced need for hygiene and greater adoption of digital interplay during the sales cycle.
Source: The Rahnuma Daily
Seeking Japanese investment in the state, the Odisha government on Wednesday said it has already created a dedicated Japanese manufacturing cluster at a place close to the state capital here. This was revealed by Industries minister D S Mishra while participating in the India-Japan investment forum virtual conference organised by Indian Chambers of Commerce (ICC). To attract investors from Japan, the state government offered 3.53 square kilometre industry ready land near Bhubaneswar, the minister said, adding that the particular land parcel is a plug-and-play industrial land with a dedicated research lab, dormitories for employees, and other facilities required for new industrial projects. Odishas Industries department also listed out advantages available in the state which included a stable government, state-of-the-art industrial infrastructure, abundant natural resources and strategically placed coastline to attract investment from the worlds third-largest economy.The minister also outlined the steps taken to streamline the investment process and to create a business- friendly environment. "To support new industries planning to set up in the state, we have an efficient single window system which hand- holds them throughout the investment grounding process," the minister said. For investors intending to set up petrochemical units in Odisha, the state has 2,500 acres of industrial ready-to- set up plots near Paradip port, also home to a large crude oil refinery facility of Indian Oil Corporation Limited, said Industries secretary Hemant Sharma. "With abundant natural resources, surplus availability of power at a cost lesser than many other industrialised states of India and a strategically located coastline, within reach of the ASEAN markets Odisha could be the most promising investment destination for countries like Japan," Sharma said while wooing investors from Japan and other Asian countries. In a separate event, the Industries minister said that the state has made satisfactory progress in setting up of different industrial parks in different places of Odisha. These industrial parks include a Plastic Park at Paradip, an Aluminium Park in Angul, Marine Food Processing Park at Deras near Bhubaneswar, Electronics Park in Bhubaneswar, PCPIR in Paradip and Ispat Cluster at Kalinga Nagar in Jajpur
Source: Business Standard
NEW DELHI: Gujarat has topped the Niti Aayog's Export Preparedness Index 2020 followed by Maharashtra and Tamil Nadu in the second and third place respectively, according to the government think tank's report released on Wednesday. According to the report, six of eight coastal states feature in the top ten rankings, indicating the presence of strong enabling and facilitating factors to promote exports. Among the landlocked states, Rajasthan has performed the best, followed by Telangana and Haryana. Among the Himalayan states, Uttarakhand topped the chart, followed by Tripura and Himachal Pradesh, the report said adding that across Union Territories, Delhi has performed the best, followed by Goa and Chandigarh. The report noted that Chhattisgarh and Jharkhand are two landlocked states that had initiated several measures to promote exports. Other states facing similar socio-economic challenges can look at the measures taken by Chhattisgarh and Jharkhand and try to implement them to grow their exports, the report noted. Speaking at the launch of the report, Niti Aayog Vice Chairman Rajiv Kumar said exports are an integral part of Aatmanirbhar Bharat and the country will have to keep striving to increase the share of exports in GDP and world trade. "We will try to double India's share in world trade in the coming years," he said. The Niti Aayog Vice Chairman pointed out that India's per capita exports are USD 241, compared to South Korea's USD 11,900 and China's USD 18,000, so there is a huge potential for growth of India's exports, he said adding "states must look at creating a separate department for exports promotion." Kumar said the government of India has made it clear that production linked incentive (PLI) schemes are critical to promote exports. He said there is a need to distinguish between coastal states and landlocked states because conditions for exports in coastal states and landlocked states are very different. Niti Aayog CEO Amitabh Kant said rapid growth of exports is a crucial component for long-term economic growth. A favourable ecosystem enables a country to contribute significantly to global value chains and reap the benefits of integrated production networks, globally, Kant added. India's merchandise exports have witnessed growth from USD 275.9 billion in 2016-17 to USD 303.5 billion in 2017- 18, to USD 331.0 billion in 2018-19. However, the COVID-19 crisis dealt a major blow to the current scale. Consequently, India's exports shrank by 60 per cent in April 2020. Niti Aayog in partnership with the Institute of Competitiveness released the rst Export Preparedness Index (EPI) 2020. The index ranked states on four key parameter - Policy; Business Ecosystem; Export Ecosystem; Export Performance. The index also took into consideration 11 sub-pillars -- Export Promotion Policy; Institutional Framework; Business Environment; Infrastructure; Transport Connectivity; Access to Finance; Export Infrastructure; Trade Support; R&D Infrastructure; Export Diversification; and Growth Orientation.
Source: Economic Times
France’s government gave further hints on Wednesday about the contents of its 100 billion-euro ($118 billion) plan to boost the economy as it seeks to reassure the country it has the situation under control. Measures will include 2 billion euros for the cultural sector, Prime Minister Jean Castex said in an interview on France Inter radio. Initially due earlier this week, full details of the stimulus package will be announced on Sept. 3, he added. France is loosening the purse strings to get the economy back on its feet after months of efforts to stop the progression of the Covid-19 epidemic. A national lockdown that began in March stifled the virus but also sent the economy into its worst tailspin on record. The government expects wealth production to contract by 11% this year, but as infections are climbing in France and around Europe, uncertainty remains high. Asked how the plan will be funded, Castex said there will be no tax hikes and pointed to the European Union’s stimulus package. Partly based on mutualized debt, France will receive around 40 billion euros from the EU, he said. The prime minister said last month that French industry would receive 40 billion euros in help, which President Emmanuel Macron said would provide an opportunity to build a greener economy. Castex has also said the government will spend 30 billion euros this year and a further 8 billion in 2021 through furlough plans to support jobs and salaries at companies suffering sustained order book declines. More than 20 billion will go toward insulating buildings, reducing emissions, local and sustainable food production, and supporting green technology.Reassuring the French Castex said on Wednesday that the government wanted to reassure the French people about its management of the health situation before unveiling more economic measures. These will mark “continuity” with emergency steps already taken, such as unemployment benefits, tax cuts and state-sponsored loans for affected companies. Macron has said the total envelope would amount to 460 billion euros. France and neighboring countries are trying to limit infections as people return from vacations, attend summer gatherings, and prepare to return to school and places of work. While officials tighten local restrictions in some areas, the government is reluctant to resort to the sweeping measures imposed during the initial peak of the pandemic in March and April. The cultural sector has been particularly hit by the crisis, and Castex said gatherings of more than 5,000 people would be banned in areas where virus circulation is high and that some events may be canceled.
Further Restrictions
Castex is set to address the health situation at a business conference later on Wednesday and again alongside Health Minister Olivier Veran and Education Minister Jean-Michel Blanquer at a news conference on Thursday morning. The government is keeping all its options open, including further restrictions in the populous Paris region, where the number of cases has been on the rise, spokesman Gabriel Attal said on Wednesday. In the southern Bouches-du-Rhone region, local authorities have decided to close businesses, bars and restaurants between 11 p.m. and 6 a.m. CET until the end of September. In Marseille, France’s second-largest city, masks are now compulsory everywhere. Masks only have to be worn in certain parts of Paris, but this could be extended.
Source: Business Standard
Japan wants to avert another state of emergency and needs to consider more stimulus to revive the economy, the government’s top spokesman said, signalling Tokyo’s resolve to focus on re-opening businesses hammered by the coronavirus pandemic. Chief Cabinet Secretary Yoshihide Suga also dismissed speculation that Prime Minister Shinzo Abe may step down for health reasons, saying Abe’s comments on Monday that he would continue to do his best in his job “explains it all”. Suga - widely seen as one of the main contenders to succeed Abe - said he had no intention of pursuing the post, even if urged to do so by associates. He said he “never thought about” taking on the position. Japan has seen a resurgence of Covid-19 infection numbers after ending nationwide state of emergency measures in late May, posing a dilemma for the government as it struggles to contain the virus without deepening the economic downturn. “We want to avoid another state of emergency that could have a big negative impact on the economy,” Suga told Reuters on Wednesday, sending a clear message the emphasis was on spurring economic growth over tightening restrictions to contain the virus. Promoting tourism would be among measures to help revive the economy, Suga said. “Japan will do whatever it takes to host the Tokyo Olympic Games next year,” he added. The Games had been scheduled to take place in late July and early August this year, but were postponed to 2021 due to the pandemic. In his position since Abe became premier more than seven years ago, Suga is now Japan’s longest serving chief cabinet secretary. He spoke to Reuters at his parliamentary office, where a large photograph of him with U.S. President Donald Trump was on display.
BOLDER ACTION
The world’s third-largest economy suffered its biggest economic slump on record in the second quarter as the pandemic hit consumption and exports, keeping policymakers under pressure to take bolder action even after deploying massive monetary and fiscal support this year. “We need to consider what we can do to prevent the economy from falling off a cliff,” he said, when asked whether Japan may deploy another spending package to cushion the blow from the pandemic. Suga also said it was “very important” for the Bank of Japan to work closely with the government preemptively, when asked whether any fresh spending measures should be accompanied by additional monetary easing. He also emphasised the need for Japan’s many regional banks to consolidate, something investors have long hoped for. A loyal lieutenant of Abe, Suga is considered a key decision-maker on economic policy. He has been seen as leading candidates to take over from Abe, whose term as head of the ruling party, and therefore prime minister, ends next September. Abe has been to hospital twice in the last two weeks, sparking concern about his ability to stay on as leader and heightening speculation about the possible transition of power. “I meet the prime minister twice a day, but I don’t see any change in his health,” Suga said.
Source : Business Standard
SINGAPORE (Reuters) - Brent crude oil prices rose on Wednesday, lifted by U.S. producers shutting most of their offshore output in the Gulf of Mexico ahead of Hurricane Laura and optimism over China-U.S. trade talks. But gains were capped amid renewed concern over the coronavirus pandemic, which has squeezed fuel demand, after reports from Europe and Asia of patients being re-infected with COVID-19, raising concerns about future immunity. Brent crude oil futures added 10 cents, or 0.2%, to $45.96 a barrel by 0642 GMT, while U.S. West Texas Intermediate crude fell 5 cents, or 0.1%, to $43.30 a barrel. Both benchmarks settled at a five-month high on Tuesday. "The hurricane impact is short-term bullish, but that could be short-lived if the damage to the Texas and Louisiana coasts cripples demand for an extended time," said Edward Moya, senior market analyst at OANDA in New York. The U.S. energy industry on Tuesday was preparing for a major hurricane strike. Producers evacuated 310 offshore facilities and shut 1.56 million barrels per day (bpd) of crude output, 84% of Gulf of Mexico's offshore production - near the 90% outage that Hurricane Katrina brought 15 years ago. "Markets are currently pricing in a possible near-term catastrophic gasoline shortage," said Stephen Innes, chief global markets strategist at AxiCorp. Top U.S. and Chinese officials reaffirmed their commitment to a Phase 1 trade deal, which has seen China lagging on its obligations to buy American goods, potentially boosting flows between the world's two largest oil consumers. Further price support came from data from the American Petroleum Institute showing U.S. crude oil stockpiles fell more than expected last week. The U.S. Energy Information Administration, the statistical arm of the Department of Energy, will release its own official inventory data later on Wednesday. Still, downward pressure came from concern about demand after data showing U.S. consumer confidence has tumbled to its lowest in more than six years due to concern about coronavirus-induced job losses.
Source: Business Standard
Annual Jackson Hole gathering will take place online for first time due to pandemic. Central bankers’ annual gathering at the Rocky Mountain resort of Jackson Hole in late August has often served as a crisis-fighting forum — from the currency meltdowns of the 1990s to the Great Recession a decade ago. Last year there was angst over the escalating US-China trade war and uncertainty over Brexit, and Donald Trump lashed out at Federal Reserve chairman Jay Powell over interest rate policy. But the macroeconomic challenge this year is of a vastly different order, with the IMF forecasting a 4.9 per cent contraction in global output due to coronavirus, the worst performance since well before the symposium was first held in Wyoming in the early 1980s. For the past decade policymakers have periodically fretted about a lack of ammunition in a world of low productivity and interest rates and already-bloated central bank balance sheets. All those constraints are being urgently revisited in light of the pandemic as the governments of advanced nations show differing degrees of willingness to aid monetary policy by hiking spending. For the first time the gathering will be held in a completely virtual format, with none of the backroom banter or views of the Tetons that have come to define Jackson Hole. Having rushed to engineer a massive policy response to the initial virus shock which briefly threatened to unleash a financial crisis, the world’s leading central banks face the next economic phase of the pandemic with a dwindling arsenal of monetary weapons and rising frustration that some key drivers of the recovery — both health and fiscal — are beyond their control. “The initial and most damaging wave of the economic hit may be past us, but further waves may come and regardless, the economic scarring will be long-lasting. Yet policy space may be narrowing,” said Mark Sobel, a former US Treasury official and chairman of Omfif, a central banking think-tank. “The Fed and the European Central Bank have used up a lot of ammo. Even when advanced economies are significantly recovering, there will still be a legacy of sky-high unemployment, large output gaps and enormous dislocations to deal with,” he added. Effects of policy Even as central banks assess their tools to fight the next stage of Covid, they are also facing growing questions about the impact of their first round of support — in particular, whether it has inflated the values of risky assets, tech stocks and housing. “There is a legitimate worry at this point that we are doing a bit of levitation,” said Robin Brooks, chief economist at the Institute of International Finance in Washington. “The massive increase in leverage and the low rates forever . . . all of these things are worrying from a financial stability point of view.” Most central bankers still hold the view that tackling the disinflationary shock and avoiding new financial market distress is their main priority — and that is expected to shine through at Jackson Hole. “It will be different, and of course the informal getting together at break will be unavailable,” said Thomas Hoenig, former president of the Kansas City Fed which hosted past gatherings. “[But] the issues are very, very clear.” US policy Mr Powell’s speech on Thursday will focus on the Fed’s monetary policy framework review — a two-year effort to update its strategy for an era of persistently low interest rates and low inflation. The conclusions of the review are still under wraps but it is widely expected to cement a more permissive approach to inflation and a more aggressive focus on reaching full employment. But some economists say this simply emphasises how close the Fed is to the limits of its capacity for action. “The Fed is running up against the longterm issue that when things are bad they are pushing on a string with monetary policy,” said Adam Posen, president of the Peterson Institute for International Economics in Washington. “You can alleviate liquidity problems, you can put a floor under some asset prices, you can stabilise credit markets, all of which is constructive but none of which is sufficient to create recovery,” Mr Posen added. management, given the impasse in Washington,” said Larry Hatheway, co-founder of Jackson Hole Economics, a private research firm. “Central bankers would rather not feel that they too are beholden to fiscal policy and increasingly they are.” Other leading central banks On Friday, Bank of England governor Andrew Bailey will report on the BoE’s own review of its monetary framework. Mr Bailey is expected to augment this with a discussion of negative interest rates, which has come onto the BoE’s agenda since he became governor earlier this year. Jagjit Chadha, director of the National Institute of Economic and Social Research in London, said: “We need to hear exactly how the Monetary Policy Committee thinks about communicating the likely path of interest rates, the end point and uncertainty.” Christine Lagarde, president of the European Central Bank, is not speaking at this year’s symposium and the ECB will be represented by Philip Lane, the chief economist, who will set out the eurozone perspective on a panel on Thursday. The ECB is also conducting a review of its policy, although its conclusion has been pushed back to next year because of the pandemic.
Source: Financial Times
An online business forum was held on August 25 with the participation of leading textile companies of Uzbekistan and Azerbaijani enterprises and retailers interested in Uzbek products. The forum titled 'Made in Uzbekistan was organized at the initiative of the Embassy of Uzbekistan in Azerbaijan. The main goal of the forum, which is held for the second time, is to create opportunities for manufacturers of export-oriented textile products to find a new distributor, expand partner network, create joint ventures with Azerbaijani companies. Addressing the forum, newly-appointed Ambassador of Uzbekistan Bahrom Ashrafkhanov said that packages of measures to support the affected sectors of the economy have been adopted and are being implemented in Uzbekistan and Azerbaijan. He stressed that a great interest of participants from business structures of the two countries gives confidence that this business forum will become a milestone event in the further strengthening and development of Uzbek- Azerbaijani relations. On his turn, Deputy Minister of Foreign Affairs of Uzbekistan Ilkhom Nematov noted that holding of such events becomes a good tradition in relations between two countries, making a worthy contribution to further development of mutually beneficial partnership relations. Nematov expressed his confidence that the forum will create opportunities for Uzbek producers of export-oriented textile products to find a new distributor, expand partner network and organize joint ventures with Azerbaijani companies. Additionally, it was stated that the possibilities of development of cooperation in the sphere of agro-industrial complex will be studied, including the use of Azerbaijan's experience in cultivation of hazelnut, pomegranate and other crops. It should be noted that Uzbek Ambassador to Azerbaijan Bahrom Ashrafkhanov met with the Deputy Minister of Transport, Communications and High Technologies of Azerbaijan Elmir Velizade on August 20. During the meeting, the sides discussed issues of further development of cooperation in the field of transport and logistics, using the opportunities of the Baku-Tbilisi-Kars railway, as well as the Baku International Sea Trade Port.
Source: MENAFN
